Venture Capitalist Confidence Rises Sharply In Q1 2012

The recently released Silicon Valley Venture Capitalist Confidence Index showed that confidence within the nation's VC community significantly increased during the first quarter of 2012.

Based on a March survey of 34 San Francisco Bay Area venture capitalists, the confidence index scored a 3.79 out of 5 -- a dramatic bump from the score of 3.27 reported during Q4 2011.

According to survey respondents, the motivating factors behind the advancing sentiment among VCs include better liquidity opportunities, and the convergence of mobility, cloud and social technologies.

"Venture capitalists that responded to the Q1 survey pointed to a more welcoming public financial market that is providing more liquidity opportunities for their portfolio firms, along with technology convergence in mobility, cloud, and social platforms which is fostering the development of a wide range of entrepreneurial endeavors," said Mark Cannice, professor of entrepreneurship and innovation at the University of San Francisco (USF) School of Management, and author of the report.

The report also showed that VCs continue to be concerned about the solidity of the U.S. and global economies as well as regulatory pressures. But despite these issues, the mood of investors is seen as generally upbeat and positive.

"Capital markets are showing sustained momentum (and) nothing beats the prospect of liquidity," said Dag Syrrist of Vision Capital. "There's an overwhelming sense of optimism, which is what's in fact needed and should be self-fulfilling."

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